PKS Politician: Luhut Is Not Enthusiastic About Freeport For Not Building A Smelter

Illustration. (Photo: Freeport Indonesia)

JAKARTA - Member of Commission VII DPR RI from the PKS faction, Mulyanto, regrets the attitude of PT Freeport Indonesia (PTFI) which seems to have neglected the obligation to build a smelter as a condition for obtaining an extension of the operational permit and export permit for copper concentrate.

According to Mulyanto, the obligation to build a smelter for mining companies is a law mandate that must be obeyed together.

"So it is very inappropriate for PTFI to try to bid on the provisions of the law that has been passed and enforced. Regarding the obligation to build a smelter as stipulated in Law No.3 / 2020 concerning Minerba for copper mining companies, it should not be negotiated anymore. The process of establishing and passing the law It has passed. Now is the time for us to implement the law in a consistent and responsible manner, "said Mulyanto in his written statement, quoted on Tuesday, November 3.

According to Mulyanto, the government must firmly remind PTFI about the obligation to build the smelter. The construction of this smelter is a legal obligation, a bond for every element of society to the State, not a horizontal business bargain.

"This is a matter of vertical-structural relations between the elements of society and the State, as a form of implementation of our constitution. Therefore it must be understood that it is not bargaining in nature, but binding and compulsary. We are a rule of law. PTFI should respect the prevailing laws in this country. Don't think of everything as negotiable trade matters. This is a fact, a rule of the game, if you want to live in Indonesia, "said the Deputy Chairman of the PKS Faction for Industry and Development.

Moreover, since the end of 2018, he continued, 51 percent of PTFI shares belong to the Indonesian government.

"So theoretically this is our BUMN. Therefore it makes no sense if BUMN want to violate the law. This is a bad precedent for governance of exploitation of natural resources in Indonesia," he said.

I think this is too much. I strongly protested. Because laws are made to be obeyed by all of us, they are not considered "winds of passage". This really insults Indonesia as a rule of law. Coordinating Minister for Marves, Luhut PanDjaitan, also seemed to be only fierce at the nickel smelter. "No voice was heard regarding this PTFI copper smelter," added Mulyanto.

Mulyanto highlighted the progress of PTFI's new smelter construction project, which until July 2020 had only reached 5.86 percent of the target of 10.5 percent.

According to Mulyanto, the government should be consistent with the established rules, namely taking a firm stance and imposing sanctions on PTFI for failing to comply with the smelter development progress target.

Mulyanto highlighted the implementation of the Minister of Energy and Mineral Resources Decree No.154 K / 30 / MEM / 2019, regarding the provisions for the physical progress of smelter construction that is at least 90% of the existing target.

"If this is not achieved, the government has the right to impose sanctions on the temporary suspension of concentrate export approvals. In addition, smelter companies are required to pay an administrative fine of 20 percent of the cumulative value of mineral sales abroad for the last six months. As well as several other administrative sanctions," he said.

According to Mulyanto, the rough calculation of the physical progress of the Freeport smelter is still below 50 percent. Therefore, the government must decide upon the sanctions immediately.

"This is important. If the government is soft and inconsistent with the existing regulations, do not be surprised if mining entrepreneurs are reluctant to build this facility and demand to be able to export concentrate," he said.

Openly Want to Break

In fact, said Mulyanto, Freeport has boldly and openly launched a discourse to violate Law No.3 / 2020, by proposing to postpone the target of smelter construction beyond the time limit stipulated by the law, namely 2023.

"Previously, violations of this law were filed on the grounds of the COVID-19 disaster. Then a new reason emerged, that the smelter construction was a loss project. This is really straightforward to openly oppose the law," said Mulyanto.

"We have memorized this style. Because there has been precedent before. The violation of Law No.4 / 2009 was first carried out by PTFI in 2014 by continuing to export concentrate and that continued until 2018, despite the mandate of Law No.4 / 2009, the smelter must operate. 2014, "he said.

In 2018, added Mulyanto, one of the conditions for PTFI to obtain an extension and change of the scheme from a work contract (KK) to a special mining business permit (IUPK) is the construction of a smelter. In fact, to this day the conditions have not been met either. Now PTFI is asking for relaxation again to violate Law No.3 / 2020.

"Therefore I urge the government to be firm in implementing and overseeing the mandate of Law No. 3/2020 as an amendment to Law No.4 / 2009 concerning Minerba, especially Article 170A. The government should not be limp, let alone violate the law," Mulyanto concluded.